National Lottery regulator appointed: Consortiums line up to run gambling venture. Gail Counsell reports

PETER BROOKE did his bit for the national heritage yesterday by adding yet another regulator to the country's lengthening list.

The Secretary of State for National Heritage has appointed Peter Davis, a 52-year-old businessman, as director general of the Office of the National Lottery, 'Oflot', which came into existence on Thursday when the National Lottery Bill gained the Royal Assent. Mr Davis, who joins co-regulators at Ofgas, Ofwat, Offer and Oftel running the gas, electricity, water and telecoms industries, will be responsible for overseeing the lottery's operation. Expected to start late next year, the lottery, which will be run under licence by a private sector group, or possibly a non-profit-making body, could raise between pounds 1.5bn and pounds 6bn a year. About half the money will be redistributed in prizes and the Treasury will take 12 per cent.

A further quarter is expected to be split equally between five charitable causes - the Arts and Sports Councils, the National Heritage Memorial Fund, charities and the Millennium Fund, a commission being set up by the Government to fund projects to celebrate 2000.

Mr Brooke said the potential impact of the lottery was 'incalculable'. It would channel hundreds of millions of pounds into good causes, 'enriching the quality of our communal life at the same time as it enriches those lucky people who will become millionaires'.

If the lottery raised pounds 1.5bn a year, he calculated it could mean about pounds 14m a week distributed in prizes and perhaps pounds 1.5m a week for each of the charitable causes, he added. He was unconcerned about the risk people would become addicted to the lottery. 'This is very much at the soft end of gambling,' he said.

Mr Davis, a non-executive deputy chairman of the Abbey National bank, is a former accountant with Price Waterhouse and former finance director of the insurance group Sturge Holdings. His pounds 80,000 a year contract will initially run for five years. He is currently drawing up draft conditions for groups seeking to run the lottery. Tenders will be invited early next year, and the first tickets are expected to be on sale by the end of 1994.

So far a number of organisations have signalled their interest: a consortium run by Rothschild merchant bank, which includes Tattersalls, the Australian lottery company; another called the Great British Lottery Company, which includes Granada and Hambro's Bank; a third called Camelot, with Cadbury-Schweppes, Racal and the US lottery operator G-Tech; and a fourth, the Rank Organisation.